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Ludhiana: Petrol pumps, LPG agencies warn of cash-only payments
The National Payments Corporation of India (NPCI) has announced a new MDR framework for select UPI transactions, which is scheduled to come into effect from October 15
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Ludhiana After years of encouraging customers to ditch cash and embrace digital payments, petrol pump owners and LPG distributors are now threatening to turn the clock back — warning that proposed Merchant Discount Rate (MDR) charges on select UPI transactions could force them to restrict digital payments and accept cash instead.
The National Payments Corporation of India (NPCI) has announced a new MDR framework for select UPI transactions, which is scheduled to come into effect from October 15. The proposed charges have triggered concern among fuel dealers and LPG distributors, who say their already-thin margins leave little room to absorb the additional cost.
Ashok Kumar Sachdeva, chairman of the Ludhiana Petroleum Dealers Association, said the proposed framework was not feasible for petrol pump dealers.
He said the biggest difficulty was that fuel dealers could not simply pass the MDR cost on to customers. At a petrol pump, the quantity of fuel and the exact amount payable are displayed on the dispensing machine, with customers paying the amount shown on the meter.
“How can we charge anything extra from the customer?” Sachdeva asked, adding that petrol dealers operate on a very low commission and would find it difficult to bear the additional cost themselves.
Sachdeva said the association had approached petroleum companies and sought a resolution to the issue. If the matter remained unresolved, he said, dealers could be forced to restrict UPI payments and revert to cash transactions.
The concern extends beyond petrol pumps. LPG distributors have also warned that MDR charges could undermine the momentum of digital payments in the sector.
Gurpal Singh Mann, president of the Federation of LPG Distributors Punjab, said a large number of gas agencies currently receive most of their payments through UPI. Imposition of MDR charges, he said, could make continuing with digital transactions financially difficult for distributors.
He warned that agencies could ultimately be left with little choice but to accept cash payments, potentially reversing the shift towards UPI.
For some distributors, the move towards UPI had been driven not just by convenience but also by security concerns.
Ravjot Singh, owner of Resham Gas Service in Khanna, said his agency had actively promoted UPI payments because salesmen collecting cash had earlier become targets for miscreants.
EOM
